Be Careful When Giving Yourself Bonuses

When the profits are flowing in, it's often tempting to give
yourself a nice, big bonus at the end of the quarter. But you'd
better keep your greed at bay if you're organized as a regular
corporation: The IRS is going after those business owners who pay
themselves too much.

To decide whether compensation is reasonable, the IRS looks at a
number of factors. These include the nature and size of the
business, the nature and scope of the work the owner does at the
company, the amount of time required for the services, and any
special qualifications the owner has. Industry surveys and
third-party studies help determine what is considered reasonable
compensation for companies in the industry.

More from Entrepreneur

Learn to be a better leader and develop successful marketing and branding strategies with Dr. Patti Fletcher's help.